Investment ideas ahead of bonus season

Ahead of bonus season, just wondering what you guys plan to invest in?


Here is my plan, but would be great if other people could give their thesis as well. 
 

I plan to dollar cost average into the following over the next 6 months (feel free to criticise)

  • S&P index fund (went down 22% YTD, so at least provides some hedge, also I am 100% in tech now so could diversify a bit into the broader economy)

-Amazon (great moat, cash cow from cloud, moat in e-commerce, ability to take on large bets and drop them if it doesn’t work)

-Coinbase (crypto exposure, buying into the infrastructure rather than any Particular project, less exposed to volatility of any specific token)

-BTC/ETH and maybe SOL/MATIC too - bullish on crypto ahead of increasing regulation And increasing adoption of web3 apps - however a bit risk averse given recent drop so I would only double down on large cap tokens to average down entry price. I have exposure to FTM/ONE too and there could be some 20-30x there but I’m a bit hesitant 

-I have past investments in Facebook / Prosus (Tencent) / Alibaba which I am quite happy about but I think I need to diversify

 
:

I don't understand why bankers always just invest in S&P.. so lazy...

Maybe because we're not fucking allowed to invest in single names?

 

I don't understand why bankers always just invest in S&P.. so lazy...

Where do you get this on DCA ? Also please explain to me while "investing ASAP" is the winning strategy, especially in a bear market

Majority of active managers underperform the market net of fees. Majority of the time cash underperforms the market. Reducing diversification reduces Sharpe ratio and underperforms the market.

By DCA-ing and picking single names you are choosing all of the strategies known to underperform the market. "Bear market" just means that the market has gone down a lot. Doesn't say anything on what it's about to do. Buying high and selling low is a classic retail investor cognitive bias.

 
Most Helpful

Majority of active managers underperform the market net of fees. Majority of the time cash underperforms the market. Reducing diversification reduces Sharpe ratio and underperforms the market.

All of the above points are true both historically and quantitatively. Beating the market is extremely hard and very few are able to do it. Maybe for the average, everyday person even, trying to beat the market makes absolutely no sense. 

But at the same time, I wouldn't totally write off the idea of picking stocks. Quantitative history shows that investors at asset managers (long-only and long/short alike) who are confident in their long ideas have seen their long ideas be largely successful. Admittedly, the same cannot be said for investors short ideas regardless of any level of confidence. 

Most everyday investors are not as smart as the investors at asset managers. Simply put, when it's not your job to be an investor full-time, you're not going to learn as much and won't be as good as investor. So for most just investing in S&P is the right idea.

At the same time, I'd hope that some of the people on this forum would be able to have a decent investment sense and have the confidence to be able to engage in a bit of stock picking. If you put the time and effort in (which can be really, really hard), I think that putting a small sleeve of a portfolio into handpicked stocks might not be a bad idea.

 


 

I don't understand why bankers always just invest in S&P.. so lazy...

Because it's easier, not restricted by compliance protocols and outperforms stock-picking in the vast majority of cases. I don't understand why you would try to reinvent the wheel lol.   

 
WB97

Just buy the S&P ASAP and don't check your account too often.

DCA systematically underperforms whacking it all in at once.

DCA underperforms in a bull market, which the market is 80% of the time, but does not underperform in a bear market. It literally is the only plausible way to go long in a bear market. Lump-sum investing in a bear market is about the dumbest thing you could do because you are effectively implying that you can time the bottom. You can dump all your cash in when the S&P is -20% and then it could go down another 15%. You should be deploying your cash systematically when stocks go down, and get more aggressive with DCA as the selling accelerates and the max drawdowns from previous highs get larger.

 
iggs99988You can dump all your cash in when the S&P is -20% and then it could go down another 15%. You should be deploying your cash systematically when stocks go down, and get more aggressive with DCA as the selling accelerates and the max drawdowns from previous highs get larger.

The S&P can always go down 15%. The likelihood of it going down 15% after a 20% drawdown is roughly the same (possibly slightly less) as it going down 15% from ATH. Any time you choose to sit in cash you are by definition trying to time the market.

 

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